International Assn. of Fire Fighters, Local 188 v. P.E.R.B (City of Richmond)
(Cal. Supreme Court, Case No. S172377)
On January 24, 2011, the California Supreme Court issued an important decision for public employers across the state, reaffirming the longstanding principle that while the effects of a public agency’s decision to lay off employees may constitute a mandatory subject of bargaining, the decision itself is not. The Court’s decision also addresses a threshold, procedural question: whether a decision by the Public Employment Relations Board (PERB) to not issue an unfair practice complaint may ever be subject to judicial review. The Court held that although a PERB refusal to issue a complaint is not normally subject to judicial review, three narrow exceptions to this rule applied.
In late 2003, the City of Richmond – faced with an unprecedented financial crisis, including a budget shortfall of approximately $9.5 million – decided to lay off 78 employees, including 18 firefighters. When the City attempted to meet and confer with the firefighters’ union (Local 188) over the proposed layoffs and related staffing issues, the union refused to discuss the effects of the City’s layoff proposal and, instead, attempted to negotiate over the layoff decision itself. When the City declined to bargain over the decision, Local 188 responded by filing an unfair practice charge with PERB, asserting that the City’s actions violated the Meyers-Milias-Brown Act (MMBA).
A PERB regional attorney dismissed Local 188’s unfair practice charge challenging the City’s refusal to bargain. PERB affirmed the dismissal, explaining that, under the MMBA, layoffs are not subject to mandatory bargaining because such decisions fall within a local government agency’s managerial prerogative.
Local 188 then filed a complaint in superior court, seeking review of PERB’s refusal to issue a complaint. The City, represented by RSHS, and PERB opposed the union’s lawsuit, arguing that, under the MMBA, a PERB refusal to issue a complaint is not subject to judicial review and, in any event, PERB correctly found that the City’s layoff decision was outside the scope of bargaining. The trial court ultimately determined that it had jurisdiction to review the matters raised in Local 188’s complaint. However, the trial court agreed with the City and PERB on the merits and held that the MMBA did not require negotiations over the City’s layoff decision. The First District Court of Appeal affirmed the trial court’s decision and, on petitions by both Local 188 and PERB, the California Supreme Court granted review.
THE SUPREME COURT’S DECISION
In a 20-page decision written by Acting Chief Justice Joyce L. Kennard, the California Supreme Court addressed two different issues: (1) whether a PERB refusal to issue a complaint under the MMBA may be subject to judicial review; and (2) whether the City’s decision to lay off firefighters for fiscal reasons was subject to mandatory collective bargaining.
As to the first issue, a majority of the Court held that, although a PERB refusal to issue a complaint is not normally subject to judicial review, three narrow exceptions to this rule applied: (1) where the agency’s decision violates a constitutional right; (2) where the agency exceeds its statutory powers; and (3) where the agency’s action is based on an erroneous construction of a statute. The Court stressed, however, that “it remains true that a refusal by PERB to issue a complaint under the MMBA is not subject to judicial review for ordinary error” and that “courts must narrowly construe and cautiously apply the exceptions we here recognize.”
With respect to the second issue, the Court reaffirmed its 35-plus year holding in Fire Fighters Union v. City of Vallejo (1974) 12 Cal.3d 608, in which the Court recognized that while the “effects” of a layoff may be subject to mandatory bargaining under the MMBA, the layoff decision itself is not. Specifically, the Court stated that “[u]nder the MMBA, a local public entity that is faced with a decline in revenues or other financial adversity may unilaterally decide to lay off some of its employees to reduce labor costs…. [A] public employer must, however, give its employees an opportunity to bargain over the implementation of the decision, including the number of employees to be laid off, and the timing of the layoffs, as well as the effects of the layoffs on the workload and safety of the remaining employees.”
Justice Marvin R. Baxter concurred with the majority’s decision on the substantive layoff issue, but dissented from the majority’s finding that Local 188 alleged a proper basis for judicial review. Specifically, Justice Baxter questioned how the majority could conclude “on the one hand, that Local 188’s substantive law claim is unmeritorious in light of long-standing settled law, and then find, on the other hand, that the union did raise a ‘colorable claim’ … that PERB’s refusal to issue the complaint was ‘based on an erroneous statutory construction.’”
The Court’s decision appears to be the final word on whether public employers have a duty to bargain over layoff decisions, providing employers with a significant bargaining chip to convince workers to accept pay and benefit cuts to close budget gaps in lieu of layoffs. However, as Justice Baxter noted in his dissent, the majority’s ruling on the underlying “jurisdictional” issue fails to draw a bright-line distinction between those PERB decisions that may be subject to judicial review and those that may not. This lack of clarity may give rise to more court challenges of PERB decisions, requiring public agencies to spend more money on legal bills.
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